November 28, 2021

Volume XI, Number 332

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Illinois Federal Court Reaffirms Dismissal of TCPA Claims By Professional Plaintiff

In a decision released last week, the District Court for the Northern District of Illinois denied a plaintiff’s motion for an order altering the court’s order dismissing the second amended complaint without prejudice and granting it leave to file an amended complaint. In Telephone Science Corporation v. Asset Recovery Solutions, LLC, the court previously granted defendant Asset Recovery Solutions, LLC’s (“ARS”) Rule 12(b)(6) motion to dismiss the second amended complaint of plaintiff Telephone Science Corporation (“TSC”), with prejudice, for failure to satisfy the “zone-of-interests” test under the Telephone Consumer Protection Act (“TCPA”).

TSC operates a service called “Nomorobo,” designed to block certain unwanted calls. TSC uses a “honeypot” of telephone numbers, analyzes calls made to those numbers to identify numbers that TSC’s service identifies as being made using an autodialer or artificial or prerecorded voice calls, and then blocks calls made to Nomorobo subscribers made using those identified numbers. TSC alleged that ARS placed over 12,000 calls to TSC’s “honeypot” numbers, for which TSC was charged as incoming calls. In its original ruling on the motion to dismiss, the court held that the claim fell outside the TCPA’s “zone of interest.” Since TSC did not suffer any injury of invasion of privacy or nuisance, and the supposed harm suffered by TSC did not impact interstate commerce, the court concluded that the damages were not of the nature that Congress intended to redress, but rather “indirect, economic and inherent to its business,” and, accordingly, dismissed the complaint.

After the court’s dismissal with prejudice, TSC moved to alter the judgment under Rule 59(e) and offered supplemental allegations by way of a proposed third amended complaint, including the allegation that once TSC has identified a telephone number as one that is placing robocalls to numbers in the TSC “honeypot,” TSC no longer needs to gather data from continued calls by that number. Instead, continued calls from these numbers “are unwanted and a nuisance, as they prevent the TSC telephone numbers from becoming ‘cleansed.’” In response to the motion, the court reaffirmed that TSC lacked standing to bring the claim under the TCPA. TSC’s supplemental allegations did not change the court’s prior recognition that the “only reason for this volume of calls . . . is due to the nature of TSC’s business, which is providing telecommunications services rather than consuming them.” The court ruled that TSC’s “nuisance” theory, that ARS robocalls became a nuisance after they no longer provided fresh data to optimize the Nomorobo service, “does not alter the reality that TSC used the TSC numbers as a telecommunications service provider, rather than a ‘consumer.’”

This decision follows two similar holdings, one by the Western District of Pennsylvania in Stoops v. Wells Fargo Bank, N.A. and the other by the Central District of California in Phillip Nghiem v. Dick’s Sporting Goods, Inc. (previously discussed here), dismissing claims from plaintiffs who invited the communications at issue as outside the “zone of interest” that Congress intended to be protected by the TCPA and thus failing to satisfy the requirements for standing.

Copyright 2021 K & L GatesNational Law Review, Volume VII, Number 10
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About this Author

Joseph C. Wylie II, KL Gates Law Firm, Commercial Litigation Attorney
Partner

Mr. Wylie’s practice focuses on complex class-action defense and complex commercial litigation with a particular emphasis on consumer and securities matters. He represents clients in defending against a wide range of individual and class-action consumer claims, including consumer fraud actions and claims brought under the Telephone Consumer Protection Act. He also represents investment advisers and mutual fund families in connection with government investigations and investor claims, including claims made under the Investment Company Act. Mr. Wylie also represents...

312-807-4439
Molly K. McGinley, KLGates Law Firm, Complex Litigation Attorney
Partner

Molly K. McGinley concentrates her practice at K&L Gates in commercial litigation with a focus on complex litigation, including investment company litigation, securities litigation and consumer class action defense. Ms. McGinley is a member of the firm’s Securities and Transactional Litigation Practice and Class Action Litigation Defense Groups. Ms. McGinley has litigated in numerous state and federal jurisdictions, representing a broad range of clients, including small companies, Fortune 500 Companies and investment advisers. She has handled various commercial...

312-807-4419
Lexi Bond, Commercial Litigation, KL Gates Law Firm
Associate

Alexandria (Lexi) Bond focuses her practice on commercial litigation, including the representation of clients in contractual disputes, business torts, false advertising and unfair competition claims, consumer complaints, and investment company and securities litigation. Her investment company litigation experience includes representing investment advisers and independent trustees in class actions, derivative lawsuits, and actions brought pursuant to Section 36(b) of the Investment Company Act of 1940. Ms. Bond also practices in the areas of regulatory compliance, internal investigations,...

312.807.4238
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